Answer to Question #5871 in Finance for Ru-Ina
Bob regards the annual inflation rate as his personal required rate of return for that particular year.
(a) without the use of interest tables (for this question only), calculate the net Present Value (NPV) of this investment.
(b) you wil notice that the nominal interest rate on his fixed deposit is lower than the discount rate (inflation rate) in all five years. however, the NPV almost ends up being positive. Explain why.
please help me...
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